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Kirin Brewery Company is spending $1.2 billion to buy Australia’s most trusted brand for vitamins and nutritional supplements, Blackmores. The Japanese brewer agreed to acquire the vitamin maker as part of its plans to expand its business into healthcare.
BBC News reported that Kirin Brewery is venturing into other business fields as beer sales in Japan are falling. Regulation of alcohol is also becoming tighter, so it needs another profit driver.
The World Health Organization (WHO) wants stricter rules to be implemented for the global alcohol sector. The organization has been calling on governments to establish higher prices for their alcoholic beverage products to dissuade people from drinking.
Coupled with the declining sales, this is why Kirin is trying to get into new businesses. In fact, this deal is the brand’s latest move in its efforts to diversify and move away from the alcohol business.
Kirin Brewery secured unanimous approval from Blackmores’ company board as it was offered an AU$95 per share, and it will pay its shareholders an AU$3.34 special dividend, according to The Japan Times. The acquisition will also save the vitamin company, which has been struggling to recover after being dampened by the COVID-19 pandemic.
The buyout deal between Blackmores and Kirin Brewery is expected to be completed this coming August. It was shared that this agreement is also supported by the Australian company’s founder’s son, Marcus Blackmore, who holds an 18% stake.
The announcement of the deal was received positively by the business community as Blackmores’ shares shot up to more than 20%. This is said to be the firm’s highest gain in more than seven years.
"The acquisition of Blackmores is highly complementary to our existing Health Science business," Kirin Brewery said in a statement. The chairwoman of Blackmores, Wendy Stops, also commented that Kirin’s deal “represents an attractive, all-cash transaction."
Photo by: Johnny Silvercloud/Flickr (CC BY-SA 2.0)
